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Trade war fears weigh on markets as Trump's new adviser blasts China - business live Trade war fears weigh on markets as Trump's new adviser blasts China - business live
(about 1 hour later)
Ever the early riser, president Trump has just tweeted that America can look forward to years of ‘fair trade’.
He’s also confirmed Larry Kudlow’s appointment to lead his National Economic Council.
Larry Kudlow will be my Chief Economic Advisor as Director of the National Economic Council. Our Country will have many years of Great Economic & Financial Success, with low taxes, unparalleled innovation, fair trade and an ever expanding labor force leading the way! #MAGA
A profit warning from soapmaker PZ Cussons has taken the shine off the mood in the City today.
Shares in PZ Cussons, which makes Imperial Leather soap and Original Source shower gel, tumbled by 15% as traders made a clean exit from the company.
It admitted that earnings will miss forecasts, claiming that British consumers were cutting back on washing products.
The UK washing and bathing division has continued to experience lower levels of purchases reflecting consumer caution across all retail channels caused by economic uncertainty and inflation out-stripping wage growth.
This has also hit other consumer goods makers, with Unilever and Reckitt Benckiser both down around 1.5%.
Across the markets, the European stocks markets are a little higher, but trade war worries abound.
Fiona Cincotta, senior market analyst at City Index, says:
The FTSE started the day higher, although there appeared little for traders to cheers. Sentiment remained downbeat as concerns of an all out trade war weighed, particularly in light of the Team which Trump is building at the White House, which is pointing to the more aggressively interventionist as far as foreign policy goes.
Added to the concerns over Trumps newly formed team, reports that the President is looking to slap tariffs on $60 million worth of imports from China, no longer just steel and aluminium, is unnerving investors.
Germany is increasingly worried that a global trade war could break out, hurting its growth and the wider global economy.Germany is increasingly worried that a global trade war could break out, hurting its growth and the wider global economy.
In a new monthly report, the German economy ministry warns that the new US tariffs on some metal imports could cause uncertainty, and hurt trade.In a new monthly report, the German economy ministry warns that the new US tariffs on some metal imports could cause uncertainty, and hurt trade.
The ministry points out that the global economy is strengthening, but fears that protectionism could scupper this progress.The ministry points out that the global economy is strengthening, but fears that protectionism could scupper this progress.
It says:It says:
For the global economy, the IMF and, more recently, the OECD for the years 2018 and 2019 now expect growth of 3.9% each. However, this does not take into account the recently introduced US tariffs on steel and aluminum.For the global economy, the IMF and, more recently, the OECD for the years 2018 and 2019 now expect growth of 3.9% each. However, this does not take into account the recently introduced US tariffs on steel and aluminum.
These could significantly affect trade in some regions. However, the impact on the global economy as a whole should remain manageable.These could significantly affect trade in some regions. However, the impact on the global economy as a whole should remain manageable.
However, a possible escalation of a trade war and increasing uncertainty among market participants could cause tangible damage.However, a possible escalation of a trade war and increasing uncertainty among market participants could cause tangible damage.
It’s important to note that Unilever isn’t quitting its impressive headquarters at Blackfriars.It’s important to note that Unilever isn’t quitting its impressive headquarters at Blackfriars.
Some staff will move to the new corporate HQ in Rotterdam. However, the company - dubbed Uni-leaver by some wags on social media - says its 7,300 UK-based employees won’t be affected by the change.Some staff will move to the new corporate HQ in Rotterdam. However, the company - dubbed Uni-leaver by some wags on social media - says its 7,300 UK-based employees won’t be affected by the change.
Even so, legal blogger David Allen Green is struck by the symbolism:Even so, legal blogger David Allen Green is struck by the symbolism:
One of the most imposing and striking buildings on the banks of the Thames is Unilever House https://t.co/yNamgAyewZSituated at Blackfriars, where the freshwater of the Thames is said to meet the saltwater of the North Sea: https://t.co/bUJhghH03U1/3One of the most imposing and striking buildings on the banks of the Thames is Unilever House https://t.co/yNamgAyewZSituated at Blackfriars, where the freshwater of the Thames is said to meet the saltwater of the North Sea: https://t.co/bUJhghH03U1/3
Blackfriars station, in turn, once proud as being where one could almost as easily board a train to continental Europe as to a London suburb: https://t.co/A03ckdpJxb2/3Blackfriars station, in turn, once proud as being where one could almost as easily board a train to continental Europe as to a London suburb: https://t.co/A03ckdpJxb2/3
And now Unilever, whose headquarters were once at this point where Britain met Europe, in the most imposing and striking modernist building, are moving their headquarters to continental Europe.3/3And now Unilever, whose headquarters were once at this point where Britain met Europe, in the most imposing and striking modernist building, are moving their headquarters to continental Europe.3/3
The London Mayor’s office are gutted that Unilever has chosen the Netherlands over Britain as its single legal base.The London Mayor’s office are gutted that Unilever has chosen the Netherlands over Britain as its single legal base.
Rajesh Agrawal, deputy mayor for business, argues that it shows the importance of keeping close ties with the EU after Brexit (even though Unilever insist Brexit wasn’t a factor):Rajesh Agrawal, deputy mayor for business, argues that it shows the importance of keeping close ties with the EU after Brexit (even though Unilever insist Brexit wasn’t a factor):
Agrawal says:Agrawal says:
“Unilever’s decision to move its headquarters to the Netherlands is clearly disappointing news for the capital.“Unilever’s decision to move its headquarters to the Netherlands is clearly disappointing news for the capital.
It brings into sharp focus the need for the Government to secure a Brexit deal that secures London as Europe’s leading business centre. The best way to do this is for London and the UK to remain part of the Single Market and Customs Union.”It brings into sharp focus the need for the Government to secure a Brexit deal that secures London as Europe’s leading business centre. The best way to do this is for London and the UK to remain part of the Single Market and Customs Union.”
The big news in the City this morning is that Unilever has chosen Rotterdam over London as the site of its new corporate base, ending its dual-HQ structure.The big news in the City this morning is that Unilever has chosen Rotterdam over London as the site of its new corporate base, ending its dual-HQ structure.
After weeks of speculation, the Anglo-Dutch consumer giant plumped for the Netherlands over the UK. It is insisting that Brexit isn’t to blame, and there won’t be job losses, but the decision is a blow to the City’s prestige.After weeks of speculation, the Anglo-Dutch consumer giant plumped for the Netherlands over the UK. It is insisting that Brexit isn’t to blame, and there won’t be job losses, but the decision is a blow to the City’s prestige.
My colleague Julia Kollewe explains:My colleague Julia Kollewe explains:
Unilever, the Anglo-Dutch consumer goods giant, has picked Rotterdam over London as its main base in a move seen as a blow to the government in the wake of the Brexit vote.Unilever, the Anglo-Dutch consumer goods giant, has picked Rotterdam over London as its main base in a move seen as a blow to the government in the wake of the Brexit vote.
The group, which makes a number of well-known consumer brands including Persil, Dove and Marmite, has been based in London and Rotterdam for nearly a century.The group, which makes a number of well-known consumer brands including Persil, Dove and Marmite, has been based in London and Rotterdam for nearly a century.
The Unilever chief financial officer, Graeme Pitkethly, insisted Brexit “was absolutely not a factor” in the decision, which was announced after a board meeting and a year-long review.The Unilever chief financial officer, Graeme Pitkethly, insisted Brexit “was absolutely not a factor” in the decision, which was announced after a board meeting and a year-long review.
Here’s her full story:Here’s her full story:
The Daily Mail think Unilever is trying to protect itself from a hostile takeover, having fought off Kraft Heinz last year.The Daily Mail think Unilever is trying to protect itself from a hostile takeover, having fought off Kraft Heinz last year.
Today’s Daily Mail City: Unilever to quit Britain pic.twitter.com/8qpc9X8I2qToday’s Daily Mail City: Unilever to quit Britain pic.twitter.com/8qpc9X8I2q
Overnight, Donald Trump gave a worrying insight into his negotiating approach with other world leaders.Overnight, Donald Trump gave a worrying insight into his negotiating approach with other world leaders.
Speaking to donors at a fundraiser in Missouri, Trump bragged about how he’d argued with Canada’s Justin Trudeau over trade - without actually knowing the facts.Speaking to donors at a fundraiser in Missouri, Trump bragged about how he’d argued with Canada’s Justin Trudeau over trade - without actually knowing the facts.
The Washington Post has the story:The Washington Post has the story:
President Trump boasted in a fundraising speech Wednesday that he made up information in a meeting with the leader of a top U.S. ally, saying he insisted to Canadian Prime Minister Justin Trudeau that the United States runs a trade deficit with its neighbor to the north without knowing whether that was the case.President Trump boasted in a fundraising speech Wednesday that he made up information in a meeting with the leader of a top U.S. ally, saying he insisted to Canadian Prime Minister Justin Trudeau that the United States runs a trade deficit with its neighbor to the north without knowing whether that was the case.
“Trudeau came to see me. He’s a good guy, Justin. He said, ‘No, no, we have no trade deficit with you, we have none. Donald, please,’ ” Trump said, mimicking Trudeau, according to audio obtained by The Washington Post. “Nice guy, good-looking guy, comes in — ‘Donald, we have no trade deficit.’ He’s very proud because everybody else, you know, we’re getting killed.“Trudeau came to see me. He’s a good guy, Justin. He said, ‘No, no, we have no trade deficit with you, we have none. Donald, please,’ ” Trump said, mimicking Trudeau, according to audio obtained by The Washington Post. “Nice guy, good-looking guy, comes in — ‘Donald, we have no trade deficit.’ He’s very proud because everybody else, you know, we’re getting killed.
“... So, he’s proud. I said, ‘Wrong, Justin, you do.’ I didn’t even know. ... I had no idea. I just said, ‘You’re wrong.’ You know why? Because we’re so stupid. … And I thought they were smart. I said, ‘You’re wrong, Justin.’ He said, ‘Nope, we have no trade deficit.’ I said, ‘Well, in that case, I feel differently,’ I said, ‘but I don’t believe it.’ I sent one of our guys out, his guy, my guy, they went out, I said, ‘Check, because I can’t believe it.’“... So, he’s proud. I said, ‘Wrong, Justin, you do.’ I didn’t even know. ... I had no idea. I just said, ‘You’re wrong.’ You know why? Because we’re so stupid. … And I thought they were smart. I said, ‘You’re wrong, Justin.’ He said, ‘Nope, we have no trade deficit.’ I said, ‘Well, in that case, I feel differently,’ I said, ‘but I don’t believe it.’ I sent one of our guys out, his guy, my guy, they went out, I said, ‘Check, because I can’t believe it.’
Trump boasted in a fundraising speech today that he made up facts in a meeting with Justin Trudeau, saying that the U.S. runs a trade deficit with Canada without knowing whether or not that was the case, WaPo reports. https://t.co/2hGnAOzNfkTrump boasted in a fundraising speech today that he made up facts in a meeting with Justin Trudeau, saying that the U.S. runs a trade deficit with Canada without knowing whether or not that was the case, WaPo reports. https://t.co/2hGnAOzNfk
Trump’s punchline is that America does run a trade deficit with Canada (as he claimed). However, US trade data actually shows a $12.5bn surplus (a $25bn surplus in services, minus a $12.5bn deficit in goods).Trump’s punchline is that America does run a trade deficit with Canada (as he claimed). However, US trade data actually shows a $12.5bn surplus (a $25bn surplus in services, minus a $12.5bn deficit in goods).
Here’s the full story: In fundraising speech, Trump says he made up trade claim in meeting with Justin TrudeauHere’s the full story: In fundraising speech, Trump says he made up trade claim in meeting with Justin Trudeau
My colleague Ed Helmore has written a profile on Larry Kudlow.My colleague Ed Helmore has written a profile on Larry Kudlow.
It covers his time working with Ronald Reagan in the 80s to his rehabilitation after being fired from Wall Street firm Bear Stearns over his cocaine addiction.It covers his time working with Ronald Reagan in the 80s to his rehabilitation after being fired from Wall Street firm Bear Stearns over his cocaine addiction.
Mazen Issa, senior foreign exchange strategist at TD Securities, says investors are concerned about Donald Trump’s next move:Mazen Issa, senior foreign exchange strategist at TD Securities, says investors are concerned about Donald Trump’s next move:
“The Trump administration is rumoured to be preparing another tariff, this time aimed at China”“The Trump administration is rumoured to be preparing another tariff, this time aimed at China”
“Taken in conjunction with speculation of additional cabinet reshuffles, broader risk sentiment could be vulnerable.”“Taken in conjunction with speculation of additional cabinet reshuffles, broader risk sentiment could be vulnerable.”
Lukman Otunuga, research analyst at FXTM warns that trade wars are bad for growth:Lukman Otunuga, research analyst at FXTM warns that trade wars are bad for growth:
With Wall Street pummelled by rising fears of U.S protectionism on Wednesday, U.S stocks are at risk of extending losses this afternoon if the negative sentiment prevails.With Wall Street pummelled by rising fears of U.S protectionism on Wednesday, U.S stocks are at risk of extending losses this afternoon if the negative sentiment prevails.
Risk aversion could become a dominant market theme moving forward, as concerns intensify over escalating trade tensions negatively impacting global growth.Risk aversion could become a dominant market theme moving forward, as concerns intensify over escalating trade tensions negatively impacting global growth.
Michael Hewson of CMC Markets wonders if Kudlow and Trump will get along like a house on fire:Michael Hewson of CMC Markets wonders if Kudlow and Trump will get along like a house on fire:
Concern that the US administration was looking to widen the scope of tariffs to Chinese goods to the tune of $60bn weighed on investors’ appetite for risk, though the declines were fairly moderate.Concern that the US administration was looking to widen the scope of tariffs to Chinese goods to the tune of $60bn weighed on investors’ appetite for risk, though the declines were fairly moderate.
This may have been down to the appointment of Larry Kudlow as President Trump’s new economic adviser, who has stated that he is not a big fan of blanket tariffs, which should make for an interesting discussion with his new boss.This may have been down to the appointment of Larry Kudlow as President Trump’s new economic adviser, who has stated that he is not a big fan of blanket tariffs, which should make for an interesting discussion with his new boss.
America’ Dow Jones index shed 1% last night, with Boeing dropping 2.5% amid worries about an escalating trade spat.America’ Dow Jones index shed 1% last night, with Boeing dropping 2.5% amid worries about an escalating trade spat.
Asian markets have been mixed today; Australia’s S&P/ASX 200 has dropped by 0.25%, India has dipped a little, while the Philippines index has shed almost 2%.Asian markets have been mixed today; Australia’s S&P/ASX 200 has dropped by 0.25%, India has dipped a little, while the Philippines index has shed almost 2%.
Asia stock mkts drop, Bonds & the Yen rise as traders adopted Risk-Off approach amid mounting concerns that growing trade tensions would hurt global econ. Trade restrictions imposed on #China would impact Asia more broadly via extensive regional supply chains. Bitcoin drops <$8k. pic.twitter.com/MeMgdUcRVEAsia stock mkts drop, Bonds & the Yen rise as traders adopted Risk-Off approach amid mounting concerns that growing trade tensions would hurt global econ. Trade restrictions imposed on #China would impact Asia more broadly via extensive regional supply chains. Bitcoin drops <$8k. pic.twitter.com/MeMgdUcRVE
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
The prospect of a protectionist trade war between the world’s major economics continues to loom over the markets today.The prospect of a protectionist trade war between the world’s major economics continues to loom over the markets today.
Donald Trump’s new economic advisor, Larry Kudlow, has intensified the pressure by claiming that Beijing hasn’t played by the rules - and needs reining in.Donald Trump’s new economic advisor, Larry Kudlow, has intensified the pressure by claiming that Beijing hasn’t played by the rules - and needs reining in.
Kudlow was named as the new director of the National Economic Council on Wednesday, and promptly went on the air to tell China to expect a tough approach.Kudlow was named as the new director of the National Economic Council on Wednesday, and promptly went on the air to tell China to expect a tough approach.
He told CBNC that:He told CBNC that:
“I must say as somebody who doesn’t like tariffs, I think China has earned a tough response not only from the United States...“I must say as somebody who doesn’t like tariffs, I think China has earned a tough response not only from the United States...
“A thought that I have is the United States could lead a coalition of large trading partners and allies against China, or to let China know that they’re breaking the rules left and right,” .“A thought that I have is the United States could lead a coalition of large trading partners and allies against China, or to let China know that they’re breaking the rules left and right,” .
That’s the way I’d like to see. You call it a sort of a trade coalition of the willing.”That’s the way I’d like to see. You call it a sort of a trade coalition of the willing.”
[that’s a reference to George Bush’s 2003 Iraq War coalition...][that’s a reference to George Bush’s 2003 Iraq War coalition...]
On CNBC, Kudlow says he wants a "trade coalition of the willing" against China, which seems unlikely given how the tariffs we're rolled out and also not the best turn of phrase given how the last coalition of the willing wentOn CNBC, Kudlow says he wants a "trade coalition of the willing" against China, which seems unlikely given how the tariffs we're rolled out and also not the best turn of phrase given how the last coalition of the willing went
This has done little to assuage concerns that Trump will soon launch new tariffs on Chinese imports, such as technology and telecommunications products.This has done little to assuage concerns that Trump will soon launch new tariffs on Chinese imports, such as technology and telecommunications products.
Kudlow (a former Reagan advisor and Wall Street economist), has criticised tariffs in the past. But he’s happy to back Trump’s new steel and aluminium tariffs.Kudlow (a former Reagan advisor and Wall Street economist), has criticised tariffs in the past. But he’s happy to back Trump’s new steel and aluminium tariffs.
He told CNBC that he was relieved that Trump had exempted Canada and Mexico, and perhaps Australia. Europe might also qualify for an exemption too, he hinted, if they cut some of the tariffs they impose on US goods.He told CNBC that he was relieved that Trump had exempted Canada and Mexico, and perhaps Australia. Europe might also qualify for an exemption too, he hinted, if they cut some of the tariffs they impose on US goods.
I don’t like blanket tariffs and I don’t think you should punish your friends to try and punish your enemies in international affairs.I don’t like blanket tariffs and I don’t think you should punish your friends to try and punish your enemies in international affairs.
My problem is the principle of the thing, I just don’t like blanket tariffs.My problem is the principle of the thing, I just don’t like blanket tariffs.
Larry Kudlow, new chief economic advisor to Trump, says China 'has earned a tough response' https://t.co/Mx3WW68HLd pic.twitter.com/gSbELXuE3iLarry Kudlow, new chief economic advisor to Trump, says China 'has earned a tough response' https://t.co/Mx3WW68HLd pic.twitter.com/gSbELXuE3i
Otherwise, the agenda is a little quiet, but there is some US economic data later:Otherwise, the agenda is a little quiet, but there is some US economic data later:
The agendaThe agenda
12.30pm: US Empire Manufacturing survey12.30pm: US Empire Manufacturing survey
12.30pm: US weekly jobless figures12.30pm: US weekly jobless figures